Rules and figures checked against official sources:

When a job in Shenzhen ends, the Labour Contract Law decides whether the employer owes economic compensation (N): one month's wage for each year of service. Some exits add one month instead of notice (N+1); an unlawful termination costs twice the standard (2N) instead. This calculator applies those rules to your dates, wage and exit route, and links every figure to the official page it comes from.

Both days count as days worked. This tool covers last days from 1 January 2022 to 31 May 2027.

What you were owed each month over the 12 months before the end, before tax and contributions, including bonuses, allowances and subsidies. With fewer than 12 months, average over the months you worked. Type digits only, without thousands separators. Implementing Regulations, Article 27

The choices are grouped: exits that carry compensation (N), an unlawful termination that carries damages (2N), and exits with no compensation under Article 46. Labour Contract Law, Article 46

High earners (optional)

Shenzhen has not published this figure for severance; enter the one you rely on. ¥16,157 is the Tax Bureau's monthly rounding of the 2025 on-post average (¥193,881 ÷ 12); ¥14,755 is the same for 2024. The cap only applies if your wage is above 3 times the figure. Type digits only, without thousands separators. Tax Bureau notice (2026) Tax Bureau notice (2025) Labour Contract Law, Article 47

Tax (optional)

Leave the date blank to use the month of your last day. Contributions means housing fund, medical, pension and unemployment contributions actually paid at the set rates when the compensation is received. Tax residence is counted for the calendar year in which the compensation is paid. Caishui [2001] No. 157, Article 2 Individual Income Tax Law, Article 1 Announcement 2019 No. 35, section 5

Annual leave (optional)

The estimate appears here once the calculator has loaded.

What this does and does not do

It estimates statutory compensation under the Labour Contract Law from what you enter, the income tax on it, and optional pay for untaken annual leave. It does not decide whether an exit was lawful, which pay items count in the wage, or which high-earner figure applies; those points are set out below. It is an estimate, not legal or tax advice.

The rules the calculator applies

Service length

Compensation (N) is one month's wage for each full year with the employer. A remaining period of 6 months or more counts as a full year; a shorter remaining period earns half a month's wage. Labour Contract Law, Article 47

The calculator counts both the first and the last day as days worked, and counts whole calendar months from the first day; a month without the matching day ends on its last day. No published rule or award settles how days at the boundaries are counted, so a result within 3 days of a boundary is flagged. Exactly 6 months is treated as 6 months or more, the reading the Civil Code gives to 以上: it includes the number itself. Civil Code, Article 1259

The monthly wage

The monthly wage is the average of what you were owed in the 12 months before the contract ended: time or piece wages plus bonuses, allowances and subsidies paid in money. With fewer than 12 months, the average is over the months actually worked. An average below the local minimum wage is raised to it. Implementing Regulations, Article 27

Shenzhen's monthly minimum wage for full-time work is ¥2,700 from 1 September 2026, and was ¥2,520 from 1 March 2025 and ¥2,360 from 1 January 2022. No official text says which date's minimum wage applies when the 12 months straddle a change; the calculator uses the one in force on your last day. Minimum wage from 1 September 2026 Minimum wage from 1 March 2025 Minimum wage from 1 January 2022

Which exits carry compensation

Article 46 lists the exits on which the employer pays compensation (N): Labour Contract Law, Article 46

  1. You end the contract under Article 38 because the employer broke the law, for example by not paying wages in full and on time, or not paying social insurance.
  2. The employer proposes ending the contract under Article 36 and you agree.
  3. The employer ends it under Article 40: illness or a non-work injury and unable to work after the medical treatment period; still not up to the job after training or a change of post; or a major change in the objective circumstances with no agreement on changing the contract.
  4. The employer makes staff redundant under Article 41, paragraph 1.
  5. A fixed-term contract expires and is not renewed, unless the employer offered to renew it on the same or better terms and you declined.
  6. The contract ends because the employer is declared bankrupt, has its business licence revoked, is ordered to close, is cancelled or decides to dissolve early.
  7. Other situations set by laws and administrative regulations, such as a contract for a defined task that ends when the task is completed.

For an Article 40 termination, the employer gives 30 days' written notice or pays one extra month's wage instead. That month is set at your wage for the previous month and is paid on top of N, which is why it is called N+1. Redundancy under Article 41 has no pay-instead-of-notice option. Implementing Regulations, Article 20

If the employer ends the contract unlawfully and you do not ask to continue it, or it can no longer continue, the employer pays damages of twice the Article 47 standard (2N). Damages replace compensation: an employer that pays 2N does not also pay N. For damages, service counts from your first day of work, including years before 2008. Labour Contract Law, Articles 48 and 87 Implementing Regulations, Article 25

Article 46 lists no compensation when you resign with 30 days' written notice (3 days during probation), when you propose ending the contract and the employer agrees, when you are dismissed for cause under Article 39, when you decline renewal on the same or better terms, when you start drawing a basic pension or reach the statutory retirement age, or when part-time (非全日制) work ends. Labour Contract Law, Articles 37, 39, 44 and 71 Implementing Regulations, Article 21

Compensation is paid when the work handover is completed. In Shenzhen, wages with a pay cycle of up to one month are due within 3 working days of the end. Labour Contract Law, Article 50 Shenzhen wage payment regulations

Service before 2008

The Labour Contract Law took effect on 1 January 2008. For a contract already running then, Article 97 counts compensation years from that date; for earlier years, compensation is paid where the rules then in force required it. Labour Contract Law, Article 97

Those earlier rules (Lao Bu Fa [1994] No. 481) were reported repealed on 24 November 2017 in a news article on a site run by the Ministry of Human Resources and Social Security, and no official text in force says how years before 2008 are compensated today. One published Shenzhen award counted the whole service of an employee hired in 2006 without splitting it. For N, the calculator therefore shows a range: service from 1 January 2008 only, up to the whole service. Counting the two periods separately, as the wording of Article 97 suggests, can give up to half a month more than the top of that range, or a full month at an exact boundary. Repeal report Published award No. 11

High earners and the cap

If your monthly wage is higher than 3 times the previous-year average monthly wage of staff published by the city government, compensation is paid at 3 times that average, and for no more than 12 years. Labour Contract Law, Article 47

Shenzhen has not published which statistic that is, or a yuan figure for severance. Asked about it, the Statistics Bureau has said that the authority handling the matter decides which figure applies, and that it has no "social average wage" indicator. Statistics Bureau reply (2024) Statistics Bureau reply (2026)

The figures that exist were published for other purposes. The Statistics Bureau put the 2025 average annual wage of on-post staff (在岗职工) in urban non-private units at ¥193,881, published on 24 July 2026, and the 2024 figure at ¥177,057; it divides an annual average by 12 for a monthly one. The Shenzhen Tax Bureau rounds them to ¥16,157 and ¥14,755 a month, and Shenzhen HRSS used ¥14,755 for the unemployment-insurance ceiling in July 2025. Statistics Bureau, 2025 wages Statistics Bureau, 2024 wages Statistics Bureau reply on monthly averages Tax Bureau notice (2026) Shenzhen HRSS reply (2025)

Published Shenzhen awards used the on-post figure for 2022, ¥13,730, for exits on 30 June 2023 and 27 January 2024. Another award used a figure published after the exit, so no rule on when a new figure takes over can be read from the awards, and no official text sets one. Published award No. 117 Nanshan award No. 52 Published award No. 20

The calculator therefore asks for the figure you rely on and shows the result with and without the cap. No published award applies the 12-year limit inside 2N, so for 2N the capped result is shown both with and without it. Labour Contract Law, Articles 47 and 87

Tax on the payment

One-off compensation received on ending employment is exempt from individual income tax up to 3 times the local previous-year average wage. Shenzhen's exempt amount, including the figure itself, is ¥581,643 for tax periods from July 2026, and was ¥531,171 from June 2025. Caishui [2018] No. 164 Tax Bureau notice (2026) Tax Bureau notice (2025)

The excess is not added to that year's comprehensive income: it is taxed on its own with the annual comprehensive-income rate table, 3% up to ¥36,000, 10% up to ¥144,000, 20% up to ¥300,000, 25% up to ¥420,000, 30% up to ¥660,000, 35% up to ¥960,000 and 45% above that. Individual Income Tax Law, rate table 1

The ¥60,000 annual deduction is part of computing comprehensive income; no official text read says in so many words whether it applies to the excess, and the calculator does not apply it. Housing fund, medical, pension and unemployment contributions actually paid at the set rates when the compensation is received may be deducted; the calculator subtracts the amount you enter. Individual Income Tax Law, Article 6 Caishui [2001] No. 157, Article 2

The employer declares every compensation payment for withholding, whatever the amount, and instalments are added together and taxed when the first one is paid. Pay for untaken annual leave is wage income and is taxed with wages, so it is not in this estimate. Tax Bureau Q&A (2026) Tax Bureau reply on leave pay

Untaken annual leave

Paid annual leave starts after 12 months of continuous work. By total working time with all employers, it is 5 days a year for 1 to under 10 years, 10 days for 10 to under 20 years and 15 days for 20 years or more. Paid annual leave regulations Implementing measures

When a contract ends, untaken leave for the year is (calendar days with this employer so far that year ÷ 365) × the full-year entitlement − leave already taken that year, and a part under one whole day is not paid. The calculator counts the first and the last day, as a published Shenzhen award did. No official text says how leave is counted in the first year of entitlement, or when 10 or 20 years of total work are reached during the year. Shenzhen HRSS answer Published award No. 111

Each untaken day is paid at 300% of the daily wage, which includes the normal wage already paid for that day, so 200% is still due. The daily wage is the average monthly wage over the 12 months before payment, excluding overtime, divided by 21.75. If the employer arranged leave and you declined it in writing for personal reasons, only normal pay is due. Implementing measures, Articles 10 to 12

What this tool cannot decide

  • Whether a termination was lawful. Labour arbitration commissions and the courts decide disputes, and an application for labour arbitration must be made within 1 year of when you knew or should have known your rights were infringed. Labour Dispute Mediation and Arbitration Law, Article 27
  • Whether the employer could use Article 40 or 41 at all. It may not for, among others, an employee within the medical treatment period, pregnant, on maternity leave or nursing, or with 15 years of continuous service and under 5 years to retirement age (Article 42). An employer with a trade union that ends a contract under Article 39 or 40 without notifying the union first can owe 2N, unless it corrected this before the lawsuit. Labour Contract Law, Article 42 Supreme People’s Court Interpretation (I), Article 47
  • Which pay items enter the wage. No official text says whether overtime pay, annual or year-end bonuses, a thirteenth-month salary, equity or months of reduced sick or stoppage pay are included. Implementing Regulations, Article 27
  • Which high-earner figure applies, whether it is rounded, and from which date a newly published figure takes over (see above).
  • Foreign employees. No official text read says whether compensation, the extra month or 2N apply to foreigners holding work permits. Since 1 September 2025, courts confirm a labour relationship for a foreigner who has permanent residence, holds a work permit and is lawfully staying in China, or has completed the procedures national rules require. A foreigner's labour contract may run for at most 5 years. Supreme People’s Court Interpretation (II), Article 4 Rules on the Employment of Foreigners, Article 17
  • Tax for non-residents. No official text read says whether the exemption and the separate tax on the excess apply to non-resident individuals, so the calculator estimates tax only for tax residents.
  • Tax on other payments. No Shenzhen or national text read says whether 2N damages, the extra month, or compensation when a fixed-term contract is not renewed fall inside the exempt one-off compensation. The Zhejiang Tax Bureau, not Shenzhen, has said compensation on non-renewal does not, and is taxed with that month’s wages. The estimate treats the whole payment as one-off compensation. Zhejiang Tax Bureau reply
  • Service with an earlier employer. Service is merged when you were moved to a new employer for reasons not of your own making, unless the old employer already paid compensation; in the Shenzhen Special Economic Zone, re-hiring by the same employer within 6 months counts service continuously, minus years already compensated, unless the earlier contract ended with a dismissal under Article 39. Enter the first day that applies. Implementing Regulations, Article 10 Shenzhen labour relations regulations, Article 24
  • Other money on exit: work-injury subsidies, wages still owed and bonuses for unfinished pay periods are separate and are not calculated here. Amounts are rounded to the yuan for display; published awards state them to the fen.

Where these numbers come from

Every rule and figure on this page comes from the official pages below, each read on 11 October 2026. Arbitration awards show how the rules have been applied; they are not rules themselves.

Laws and regulations

Shenzhen figures and statements

Tax

Annual leave

How the rules have been applied: published arbitration awards